Stephen Tyler

The greatest obstacle to discovery is not ignorance – it is the illusion of knowledge.

When will a competitor for the iPad arrive?

The iPad is completely dominant in the tablet space. With around 70% market share, it is the product that every competitor’s product is measured against. And those competitors have all been failures so far. So why have they failed:

  • They are more complicated to use than the iPad. The iPad has iOS and iTunes with hundreds of thousands of apps ready and waiting to purchase with the press of a finger. The competitors have a mish-mash of versions of Android (which is kind of kludgy compared to iOS), and marketplace that is tiny by comparison, with very little quality control. The purchaser of an iPad competitor needs to be much more tech-savy.
  • They are priced either at a similar price-point, or a higher price-point. If you can afford an iPad, why buy a product that is merely trying to be an iPad.
  • They are differentiated only by minor hardware differences, such as I/O ports. The competitors are unable to differentiate themselves with software, since they are built by hardware companies using free software built by other parties.
  • They invariably look inferior to an iPad. This is partly because they are all trying to be an iPad, without being so close that Apple will be able to block their sale. And partly because they are trying to be cheaper than an iPad, so corners are cut with materials.
  • Apple has enormous economies of scale. They get first access to all the new display technologies, batteries, flash memory and processors. All the other competitors have to wait for the manufacturing facilities to have excess capacity, which can be months after Apple has already launched new products utilising that new technology. And if there are supply constraints, Apple’s schedule will always be honoured first.

So far, the only significant tablet other than the iPad has been the HP TouchPad, which was abandoned by HP after being on sale for just a few days and liquidated in a US$99 fire-sale. At US$99, consumers rushed to buy the device. This clearly demonstrates that there is a market for an iPad competitor, if only it can be clearly differentiated from the iPad on price.

Perhaps the forthcoming Kindle from Amazon will be the first real competitor. Rumours say that they will release a 7-inch touchpad at a price of US$249. This is quite significantly different from the iPad, and has the potential for significant sales:

  • The price point is well below the iPad.
  • The device will be marketed as an enhanced Kindle (eBook reader), rather than a crippled iPad.
  • The device will be simple to operate (like the Kindle).
  • The brand is widely known and dominant in the eBook market.
  • It will be marketed to non-technical customers (book readers), based on software and marketplace features rather than technical specs.
  • The size will make it considerably more portable than the iPad. The iPad is too big to comfortably carry around all day. And the iPhone is too small for comfortable eBook reading, web browsing and typing.
  • Amazon has a huge customer base and diverse product range, allowing all manner of cross-selling opportunities and after-market sales.

I’ll be keeping a close eye on Amazon’s launch of the new Kindle. If the screen is good for eBook reading, the battery life is good, and the Android OS is not crippled then I think they will have a winner.

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